5812.07
Determination and distribution of net income.

After a decedent dies, in the case of an estate, or after an
income interest in a trust ends, all of the following apply:

(A)
The fiduciary of the estate or of the
terminating income interest shall determine, under the provisions of sections
5812.12 to
5812.47 of the Revised Code that
apply to trustees and under division (E) of this section, the amount of net
income and net principal receipts received from property specifically given to
a beneficiary. The fiduciary shall distribute the net income and net principal
receipts to the beneficiary that is to receive the specific property.

(B)
A fiduciary shall determine
the remaining net income of a decedent's estate or a terminating income
interest under the provisions of sections
5812.12 to
5812.47 of the Revised Code that
apply to trustees and by doing all of the following:

(1)
Including in net income all income from
property used to discharge liabilities;

(2)
Paying from income or principal, in the
fiduciary's discretion, fees of attorneys, accountants, and fiduciaries; court
costs and other expenses of administration; and interest on death taxes.
However, the fiduciary may pay those expenses from income of property passing
to a trust for which the fiduciary claims an estate tax marital or charitable
deduction only to the extent that the payment of those expenses from income
will not cause the reduction or loss of the deduction.

(3)
Paying from principal all other
disbursements made or incurred in connection with the settlement of a
decedent's estate or the winding up of a terminating income interest, including
debts, funeral expenses, disposition of remains, family allowances, and death
taxes and related penalties that are apportioned to the estate or terminating
income interest by the will, the terms of the trust, or applicable law.

(C)
A fiduciary shall
distribute to a beneficiary that receives a pecuniary amount outright the
interest or any other amount provided by the will, the terms of the trust, or
applicable law from net income determined under division (B) of this section or
from principal to the extent that net income is insufficient. If a beneficiary
is to receive a pecuniary amount outright from a trust after an income interest
ends and no interest or other amount is provided for by the terms of the trust
or applicable law, the fiduciary shall distribute the interest or other amount
to which the beneficiary would be entitled under applicable law if the
pecuniary amount were required to be paid under a will.

(D)
A fiduciary shall distribute the net
income remaining after distributions required by division (C) of this section,
in the manner described in section
5812.08 of the Revised Code, to
all other beneficiaries, including a beneficiary that receives a pecuniary
amount in trust, even if the beneficiary holds an unqualified power to withdraw
assets from the trust or other presently exercisable, general power of
appointment over the trust.

(E)
A
fiduciary shall not reduce principal or income receipts from property described
in division (A) of this section because of a payment described in section
5812.42 or
5812.43 of the Revised Code to the
extent that the will, the terms of the trust, or applicable law requires the
fiduciary to make the payment from assets other than the property or to the
extent that the fiduciary recovers or expects to recover the payment from a
third party. The net income and principal receipts from the property are
determined by including all of the amounts the fiduciary receives or pays with
respect to the property, whether those amounts accrued or became due before,
on, or after the date of a decedent's death or an income interest's terminating
event, and by making a reasonable provision for amounts that the fiduciary
believes the estate or terminating income interest may become obligated to pay
after the property is distributed.